Exxaro Resources: Powering Through Challenges

Exxaro Resources Ltd (JSE: EXX) recently unveiled its full-year earnings for 2023, painting a picture of resilience amidst a backdrop of economic fluctuations. Despite reporting a 17% decline in revenue to R38.7 billion and a 34% drop in operating profit to R10.6 billion compared to the prior year, the diversified resources giant remains steadfast in its commitment to shareholders, declaring a dividend of R10.10 per share, albeit reduced from the previous period. 

While overall performance faced headwinds, glimmers of positivity emerged from select operating segments. Notably, the energy business exhibited remarkable resilience, with revenue soaring by 16% on the back of favourable wind conditions. The stability of the earnings before interest, taxes, depreciation, and amortization (EBITDA) margin at 80% underscores the robustness of the long-term offtake agreements supporting the business’s operations. Coal production and sales volumes dipped slightly, and revenue dropped 18% to R37 billion. This decrease was due to a combination of factors, including lower demand from South Africa’s power utility, Eskom and subdued global export prices. 

Despite challenges in its coal division, Exxaro’s energy arm shines as a beacon of growth, generating 8% more electricity than the previous year. As Exxaro navigates the ever-evolving landscape of the resources sector, its ability to weather storms while harnessing opportunities for growth remains a testament to its resilience and strategic foresight. 


Exxaro Resources’ price action reveals a compelling narrative of market dynamics within a downtrend. With the share price positioned below the 100-day moving average and confined within a descending channel pattern, bearish sentiment prevails.  

A notable downturn from the R186.18 resistance level, fuelled by increased selling pressures and bearish volumes, breached the channel’s lower boundary. However, amidst oversold RSI conditions, downward momentum halted near the R160.04 support level, triggering a rebound.  

Currently, the share price has retraced to the 61.80% Fibonacci Retracement Golden Ratio, signalling a critical juncture for traders. A continuation of upside momentum could see a retest of the R186.18 resistance level, while a resurgence of bearish pressures might stall the share price at the Golden Ratio level, potentially leading to a reversal towards the R160.04 support. 


Amidst revenue and profit declines, Exxaro Resources (JSE: EXX) resiliently declared dividends, showcasing its commitment to shareholders. While the coal sector challenges persist, the energy arm’s robust performance underlines growth potential. Exxaro’s strategic resilience in a volatile market is evident with the share price navigating key technical levels. 

Sources: Exxaro Resources LTD, MoneyWeb, IOL, African Mining Market, TradingView  

Piece Written By Nkosilathi Dube, Trive Financial Market Analyst 

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